Borders files for Chapter 11, 30% of stores to close

Borders bookstores will be cutting staff and closing nearly 200 stores after filing for bankruptcy.

In a statement, the company cited the economic downturn, among other factors leading up to the filing:

“It has become increasingly clear that in light of the environment of curtailed customer spending, our ongoing discussions with publishers and other vendor related parties, and the company’s lack of liquidity, Borders Group does not have the capital resources it needs to be a viable competitor.”

The move comes after weeks of rumors suggesting the chain’s filing for bankruptcy was imminent. A spokesman for the company says bankruptcy is the best option to protect Borders’ long-term viability:

“This decisive action will give Borders the opportunity to achieve a proper infusion of capital in order to have the opportunity to have the time to reorganize in order to reposition itself to be a successful business for the long term.”

“Turnaround expert” Ken Dalto suggests the chain could merge with a seller like Barnes & Noble:

“They could be merged or bought by Barnes & Noble out of bankruptcy to create one super bookseller in the United States,” he said.

You might want to use up any Borders gift cards you’ve got hanging around, just in case.

[Detroit Free Press, CNNMoney]